Oil price falls toward $94 on supply increase

The price of oil fell slightly Thursday after forecasts for global oil demand were cut and U.S. inventories of crude continued to rise.

By early afternoon in Europe, the benchmark oil contract for May delivery was down 23 cents to $94.41 a barrel in electronic trading on the New York Mercantile Exchange. The contract finished up 44 cents on Wednesday.

The International Energy Agency lowered its expectations for global demand for crude in 2013 by 45,000 barrels a day, to 90.6 million barrels a day. That is 795,000 barrels a day more than in 2012.

"A weak macroeconomic environment is expected to keep demand growth relatively subdued for the remainder of the year," the Paris-based IEA said.

Its predictions echoed those made by OPEC, which comprises the world's key oil exporters.

While oil prices have eased recently, the IEA listed several factors which could threaten supplies and boost prices. They include extreme weather in several parts of the world, geopolitical threats like the conflict in Syria and tension over Iran's nuclear program, and safety concerns in major oil producers Libya and Nigeria.

"While fundamentals may be easing, rarely has the market faced such diffuse risks," the IEA said in its latest Oil Market Report.

Oil prices were also burdened by evidence that U.S. stockpiles of crude are rising. On Wednesday, the U.S. Energy Department said weekly supplies grew by 300,000 barrels, or 0.1 percent, to 388.9 million barrels. That puts U.S. oil supply at its highest level since July 1990.

Oil gained some support from a weaker dollar, which makes crude cheaper for traders using other currencies. On Thursday, the euro was up to $1.3119 from $1.3069 late Wednesday in New York.

Brent crude, which sets the price of oil used by many U.S. refineries to make gasoline, was down 1 cent to $105.78 a barrel on the ICE Futures exchange in London.